Download Report (PDF/219kb)

THE VANCOUVER BOARD OF TRADE

THE GOVERNANCE OF TRANSLINK

February 4, 2002

Background

The governance of TransLink is one of the most serious problems facing the Greater Vancouver region.

TransLink holds primary responsibility for the planning, development, operation and maintenance of the regional transportation network in Greater Vancouver. This includes regional roads, bridges and transit (transit buses, rapid transit and intra-regional passenger ferries).

This responsibility is vital to the people and to the economy of the region. The movement of residents within the region, the movement of visitors, and the movement of goods and services are all greatly affected by TransLink. The ability of business to operate and even to exist in the region is dependent upon regional transportation. The functioning of Greater Vancouver’s transportation gateways (Vancouver International Airport, the ports of the region, the railways and the roads linking the region to other areas) is dependent on the regional transportation network.

Current Governance of TransLink

The TransLink organization grew out of the transit function in the region. Its governance is through a board of directors who largely are elected members of local governments in the region. With some exceptions, the directors of the Greater Vancouver Regional District from among their own ranks select TransLink directors. In turn, each municipal council selects from among the members of their council individuals to be the directors of the Greater Vancouver Regional District. Other directors of the Greater Vancouver Regional District represent areas in the region not covered by the regional’s seventeen municipalities. Although the Greater Vancouver Transportation Authority Act of the Provincial Legislature provides for three provincial government representatives to sit on the TransLink board, those representatives resigned some time ago and have not been replaced.

Dissatisfaction with TransLink Performance and Governance

Since its creation approximately two years ago, TransLink has become the object of dissatisfaction from among the citizens of the region, some of the municipalities of the region, and organizations representing transit users, automobile users, truckers, businesses, and the region’s transportation gateways. For some, this dissatisfaction began with TransLink’s strategic transportation plan for the region. That plan deals with the broad-reaching regional transportation responsibilities of TransLink, but in terms of financial resources, the plan is largely directed towards transit.

This imbalance is despite the fact that transit accounts for only about eleven per cent of journeys to and from work by residents of the region. The plan projects that this figure will rise to only about fourteen per cent even though more than a billion dollars of capital investment in transit is planned over almost a decade. There is relatively little provision in the plan for capital investment in roads and bridges, despite the serious congestion already affecting residents traveling to and from work by automobile and affecting the movement of goods and services in the region.

Added to this situation have been contentious proposals to resolve serious revenue challenges facing TransLink. These together with the lengthy interruption of transit services, as a result of collective bargaining problems, have resulted in substantial public dissatisfaction. Hopefully both of these issues are being resolved, giving TransLink a couple of years to address underlying problems, including governance.

Problems with the TransLink Name

The name TransLink now has a substantial negative connotation in the minds of the public and transportation stakeholders. Consideration should be given to the use of the generic name of the organization, the Greater Vancouver Transportation Authority. This would help to dispel the association of the name with transit rather than with the broader transportation responsibilities that TransLink holds.

The Mandate of TransLink

The mandate of TransLink is regional transportation. That includes far more than transit. If TransLink does not step up to and act on that broader mandate, then it should be recognized as a transit authority only and another mechanism should be found to address the other serious regional transportation challenges that are already having strong negative effects on the regional economy. An increased priority must be given to the development of efficient transportation infrastructure to facilitate the movement of goods and services, as envisioned in the Major Commercial Transportation System plan developed by the Greater Vancouver Gateway Council and others.

If TransLink retains responsibility for both transit and roads in the region, the organization’s renewed or revised mandate must include very clear direction to take a balanced approach to transportation, with a substantial amount of its efforts and resources directed towards the road network. While the transportation network must continue to be developed in concert with land use planning for the region, it is essential that the economic well-being of the region be a primary consideration in the plans and actions of TransLink. Further, the capital and operating expenditures of TransLink must be shown to be cost-effective and affordable, rather than simply following land use planning.

There is a school of thought that transportation must follow and support land use planning. However, given the very large costs of transportation infrastructure and the need to have efficient transportation as a key to a healthy regional economy, land use planning must take into account both the existing transportation infrastructure and the cost of establishing new infrastructure. A monumental problem facing TransLink is the very high cost of establishing the new rapid transit lines that are in the existing strategic transportation plan as a reflection of the existing regional land use plan.

There is a further problem related to the current land use plan for the region. Individual municipalities have not necessarily conducted their own land use planning and actual development in compliance with the regional plan. While measures have been taken to help correct that, this gap remains a problem for the planning and implementation of transportation facilities and services in the region.

Governance Problems

The preoccupation of TransLink with transit has been in part a natural outgrowth of the organization inheriting the transit function. That preoccupation has also been a result of the governance of TransLink by a group of local politicians who do not have direct accountability to the public for the activities of the organization.

The governance of TransLink also lacks direct input from key stakeholders substantially affected by the transportation system. In particular, groups representing transit users, automobile users, truckers, businesses and the region’s transportation gateways lack representation on the TransLink board of directors. As a result, their concerns with respect to the direction of TransLink have had to be pursued through private persuasion and public airing of grievances. Consultation among these groups has indicated substantial dissatisfaction with the governance of TransLink.

TransLink itself has recognized the governance problem, and has begun a process to address it.

Governance Alternatives

One idea that has emerged is for TransLink to be made a direct responsibility of the Greater Vancouver Regional District, with all of the directors of the regional district holding responsibility for governance of TransLink. This would be a step in the wrong direction. It would tend to perpetuate the transit orientation of TransLink. It would subject TransLink to even more parochial interests, mesh it with the bureaucracy of the Greater Vancouver Regional District and would not provide for representation of the key stakeholder groups referred to earlier. It would not relieve the threat to the regional economy from inadequate appreciation for and attention to the interests of automobile users and the movement of goods and services.

Another governance model is that of the Vancouver Port Corporation, which has been successful. Each of the Government of Canada, the Government of British Columbia, the governments of the three Prairie Provinces (as a group) and the municipalities immediately adjacent to the port (as a group) appoint one director, (i.e., these stakeholders appoint a total of four directors). The Port Advisory Committee, representing users of the port, submit names of individuals to be considered for the remaining five director positions. At least two names must be submitted for each vacancy to be filled in this way. The Governor in Council then selects individuals from the list to fill these vacancies. In these ways the total of nine directors are appointed. Although port users were unhappy with the way the process was implemented initially, more recently they have been pleased with the appointments.

There is another model of governance in this region that has been demonstrated to be highly successful. This is the Vancouver International Airport Authority. The success of the Authority in dealing with this key large part of regional transportation infrastructure is clearly evident. This model involves a series of stakeholder organizations as nominating entities that nominate directors to the board of the Airport Authority. The board in turn appoints a number of other directors at large. The nominating entities include The City of Richmond; The City of Vancouver; The Greater Vancouver Regional District; the Law Society of British Columbia; the Association of Professional Engineers and Geoscientists of British Columbia; the Institute of Chartered Accountants of British Columbia; The Vancouver Board of Trade and the Government of Canada (which nominates two directors). The airport model provides a potentially good model for TransLink provided that the changes suggested below are made.

Recommendations

The Vancouver Board of Trade believes that the future governance of TransLink should be based upon the model used by the Vancouver International Airport Authority or that used by the Vancouver Port Corporation, or a hybrid.

The key stakeholders in regional transportation should have substantial board representation. The latter would include directors nominated by groups representing transit users, automobile users, truckers, businesses and the region’s transportation gateways. Specifically, consideration should be given to having representation from BEST (Better Environmentally Sound Transportation), the British Columbia Automobile Association, the British Columbia Trucking Association, the Lower Mainland Regional Chambers of Commerce Transportation Planning Panel, The Vancouver Board of Trade and the Greater Vancouver Gateway Council.

Clearly, the public at large in the Greater Vancouver region should have substantial representation on the board of TransLink. The shortcomings of the previous process of appointed representation has been discussed earlier in this document. However, some members of the board of directors of TransLink should be drawn from among elected politicians in the Greater Vancouver Region. The number should not be so large as to control the board.

The provincial government also has a vital interest in transportation in the Greater Vancouver Region. There should be some directors on the board of TransLink who are appointed by the Government of British Columbia. Consideration should also be given to having federal government representation on the board.

As in the case of Vancouver International Airport, there should be a requirement for TransLink to have among its board of directors some key skills, such as accounting/finance, engineering, legal and of course substantial transportation expertise.

For application to TransLink, the Vancouver International Airport Authority governance model should be modified to fit TransLink’s particular needs including aspects of accountability. The Vancouver Board of Trade has extensively reviewed the success of the Vancouver International Airport Governance model and has offered constructive suggestions that are outlined in the appendix to this document.

Subject to that qualification, we believe that the governance of the Vancouver International Airport Authority, or the governance of the Vancouver Port Corporation or a hybrid of these should be used to establish a revised governance structure for TransLink. This should be done expeditiously. The economy of Greater Vancouver is already being seriously affected by transportation congestion. Transport Canada recently estimated that the annual cost of that congestion is in the range of $700 million to $1.3 billion. The status quo is unacceptable, and decisive action must be taken to relieve the transportation problems that are beginning to strangle the regional economy. The governance of TransLink and the regional transportation strategic plan must be changed to provide the balance required to achieve the resolution of those problems.

It is beyond the scope of this document to make more explicit recommendations concerning the governance of TransLink, including the specific changes required to the Greater Vancouver Transportation Authority Act. However, The Vancouver Board of Trade would like to be involved in discussions leading to those changes.

APPENDIX

Extract from

THE VANCOUVER BOARD OF TRADE

REPORT BY SPECIAL COMMITTEE
ON THE
VANCOUVER INTERNATIONAL AIRPORT

December 2000

The complete text of this report may be under the heading "Reports" on this web site.

The Vancouver Board of Trade

REPORT BY SPECIAL COMMITTEE ON
THE VANCOUVER INTERNATIONAL AIRPORT

Summary

Vancouver International Airport Authority (the "Authority") has been a remarkably successful example of the devolution of airports from the federal government to community control. The very substantial improvements to the airport in recent years were enabled by the change to community control and the creation of the Authority in 1992. These developments have contributed to the airport’s achievement of national and international recognition for passenger convenience and satisfaction, remarkable increases in passenger and cargo volumes, and a high rating from bond agencies.

Despite the Authority’s obvious success, there have been continuing concerns with the Authority’s governance structure and processes. These were outlined in a Vancouver Board of Trade task force report in 1994, and by PricewaterhouseCoopers in their 1998 report of the mandatory five-year review of the Authority. Problems with respect to other major community controlled airports in Canada and a negative review by the Auditor General concerning Transport Canada’s role regarding airport governance led to the Minister of Transport stating that legislation would be introduced to change the state of affairs.

The Vancouver Board of Trade (The Board) is quite concerned that the legislation could adversely affect community control of airports. Accordingly, in June 2000 The Board formed a Special Committee to deal with the situation. The purpose of the Special Committee on Vancouver International Airport is to suggest community-based improvements to the governance structure and processes of the Authority in advance of the legislation to be introduced by the Minister of Transport. In carrying out its work, the Special Committee has consulted with each of the other nominating entities and with a broad cross-section of stakeholders and knowledgeable observers. The need for the work of the committee has been confirmed by the release of the Auditor General’s report and through discussions with the Ministry of Transport.

The current governance structure of the Authority provides for seven community-based nominating entities, with each appointing a director to the board of the Authority. An additional entity, the federal government, appoints two directors. The President and Chief Executive Officer is automatically a director. In addition, the board of the Authority itself elects up to five (currently four) additional directors at large, for a total of fifteen (currently fourteen) directors.

In almost every case, not-for-profit societies such as the Authority have members who hold ultimate power over the organization. The directors of the society are responsible to the members and are elected by them. However, in the case of the Authority, the directors also act as the members of the society. Technically, they are not accountable to anyone else. It is the lack of explicit accountability that is at the root of the current concern with respect to the governance structure and processes of the Authority.

Fundamental to any future direction is the intent for community accountability that was set out by the Minister of Transport when the Authority was created in 1992. The process envisioned at that time had the individual directors accountable to their nominating entities, with the nominating entities providing community input. However, it immediately became apparent that the fiduciary responsibility of directors was to the Authority, and this effectively created a barrier to the kind of accountability that had been intended. Thus, a fundamental flaw in governance was created from the outset.

The Special Committee of The Board of Trade believes strongly that any changes which are made affecting the governance structure and processes of the Authority must not adversely affect the performance of the organization and must not be cumbersome. These changes should simply provide community-based solutions to problems that have been, for the most part, apparent since the establishment of the Authority.

Following are the key recommendations of the Special Committee for changes in the governance structure and processes of the Authority:

• The nominating entities would continue to appoint directors as at present.
• The role of member and the role of director should be separated.
• The nominating entities would be designated as the members of the Authority, and would act as surrogate shareholders.
• The members’ role would be primarily to elect directors and carry out other functions at the annual general meeting of the Authority.
• Members, not the directors, would appoint directors at large after consultation with the Authority.
• Transport Canada should develop guidelines relating to the role and duties of nominating entities (members).
• The areas of British Columbia outside of Greater Vancouver are vitally dependent upon Vancouver International Airport. There should be provision to have two directors who reside in areas of British Columbia outside Greater Vancouver.
• As might be expected in any enterprise of this magnitude and complexity, there will be situations that arise involving conflict or disputes between users and the Authority. To deal with these, after consultation with the Authority, members should appoint an Ombudsman.
• The approval of changes to fees and charges should be a responsibility of the Board of Directors of the Authority, with the right of appeal to the Ombudsman.
• It is important that there be no return to a regulatory regime involving regulatory authority such as has existed in the past with respect to transportation. Oversight of the Authority ought to be community-based and not regress to the Canadian Transportation Agency or other federal body.
• The transparency, openness and accountability of the Authority appear to be uneven. It is important that the Authority, as an organization operating in the public sphere, make vigorous efforts to help ensure consistent transparency, openness and accountability.
• There should be prescribed minimums of communication that will ensure that the nominating entities/members have the information required to discharge their responsibilities.
• All significant matters facing the Authority should be subject to a broadly based, open and transparent public consultation process. In consultation with the nominating entities and other key stakeholders, the Authority should develop and publish a policy prescribing the consultation processes covering a broad range of potential issues.

Current Governance Structure

The current governance structure of the Vancouver International Airport Authority provides for eight nominating entities that each appoints a director to the board of the Authority. One entity, the federal government appoints two directors. The President and Chief Executive Officer is automatically a director. In addition, the board of the Authority itself elects up to five (currently four) additional directors at large, for a total of fifteen (currently fourteen) directors. The nominating entities are:

The City of Richmond
The City of Vancouver
The Greater Vancouver Regional District
The Law Society of British Columbia
The Association of Professional Engineers and Geoscientists of British Columbia
The Institute of Chartered Accountants of British Columbia
The Vancouver Board of Trade
The Government of Canada (which nominates two directors)

In almost every case, not-for-profit societies such as the Authority have members who hold ultimate power over the organization. The directors of the society are responsible to the members and are elected by them. However, in the case of the Authority, the directors also act as the members of the society. Technically, they are not accountable to anyone else as would be the case in almost all other societies and not-for-profit organizations and private sector corporations whose shareholders would have that responsibility. The directors of the Authority legally are not accountable to any stakeholder, except that the Minister of Transport and the federal government do have the ability to withhold approval of changes to the by-laws of the Authority. Of course, the Minister always has the authority to introduce legislation affecting airport authorities.

It is the lack of explicit accountability other than through the authority of the Minister and the federal government that is at the root of the current concern with respect to the governance structure and processes of the Authority.

Community Accountability

Fundamental to any future direction is the intent for community accountability that was set out in the initial press releases from the Minister of Transport in 1992. The process envisioned at that

time had the individual directors accountable to their nominating entities, with the nominating entities providing community input. However, it immediately became apparent that the fiduciary responsibility of directors was to the Authority, and this effectively created a barrier to the kind of accountability that had been intended. Thus, a fundamental flaw in governance was created from the outset.

Copyright 1999-2009 The Vancouver Board of Trade. All Rights Reserved
Site Credits Privacy Policy